Textile industry stands second in generating more employment in the nation next to agriculture. Total textile exports account to, 38 billion us dollars. Textile industry shares, 4.3 percent in the GDP.
Coimbatore: Textile industry stands second in generating more employment in the nation next to agriculture.
There are 52.47 million spindles are in spinning sector. 8.76 lakh rotars, 24 lakh power looms and 22.86 lakh handlooms are established across India. Each year on an average 350 lakh bales of cotton is produced in the country In which, 300 lakh bales are used within the country and 50 lakh bales are been exported.
Total textile exports account to, 38 billion US dollars. Textile industry shares, 4.3% in the GDP. More than 110 million people have got employment both directly and indirectly. In global garment exports, India share is, 5.2%.
Since Government identified textile industry as trust area, for economic growth of the nation, more importance is given to this sector. While the industrialists were happy and welcoming government initiatives suddenly the recent announcement by the Central government increasing the GST rates for cotton fabric and garments from 5% to 12% has shocked the industrialists of the entire textile value chain.
The Southern India Mills Association (SIMA) Chairman, Ravi Sam and Confederation of Indian Textile Industry (CITI) Chairman, Rajkumar said, "Previously under GST scheme inverted duty problem was a big headache to industrialists. In the synthetic sector, fibre was fixed with 18%, yarn 12%, fabric, garment 5%. Due to this different types of tax rates, inversion was a big headache. Following the request made by the textile Associations Fibre(Synthetic) was fixed with 12%. textile job works sector were also changed to 12% which is welcomed.
But, unfortunately the government has increased the tax rate for cotton fibre and garments from 5% to 12%. The cotton textile sector was witnessing smooth functioning with 5% tax rate. The sudden increase of tax rate to 12% has very badly affected the livelihood of many lakh handloom and powerloom weavers. Compounding rate also a big issue to many lakh MSME Industrialists. Previously until Rs 1.5 crores, industrialists need not submit returns on monthly basis. Whereas they shall pay 1% of the total turnover. Co-optex also was buying the cotton textile products at 5% tax rate.
Synthetic is a petroleum product and hence the tax rates of 12% fixed by the government is correct, whereas in cotton textiles sector also the government is planning to keep the same kind of 12% tax rate is not fair. This will directly affect many lakh handloom and powerloom weavers. They only manufacture 80% cotton textiles. Also 80% of the small traders only contribute in this sector. Hence the ministry of textiles should change the GST for cotton textiles from 12% to 5%. It is the need of the hour. We have also stressed this in our pre budget representation to reduce the GST tax rate to 5% for cotton fabric and garments below Rs 1,000 as before." They said.
There are 52.47 million spindles are in spinning sector. 8.76 lakh rotars, 24 lakh power looms and 22.86 lakh handlooms are established across India. Each year on an average 350 lakh bales of cotton is produced in the country In which, 300 lakh bales are used within the country and 50 lakh bales are been exported.
Total textile exports account to, 38 billion US dollars. Textile industry shares, 4.3% in the GDP. More than 110 million people have got employment both directly and indirectly. In global garment exports, India share is, 5.2%.
Since Government identified textile industry as trust area, for economic growth of the nation, more importance is given to this sector. While the industrialists were happy and welcoming government initiatives suddenly the recent announcement by the Central government increasing the GST rates for cotton fabric and garments from 5% to 12% has shocked the industrialists of the entire textile value chain.
The Southern India Mills Association (SIMA) Chairman, Ravi Sam and Confederation of Indian Textile Industry (CITI) Chairman, Rajkumar said, "Previously under GST scheme inverted duty problem was a big headache to industrialists. In the synthetic sector, fibre was fixed with 18%, yarn 12%, fabric, garment 5%. Due to this different types of tax rates, inversion was a big headache. Following the request made by the textile Associations Fibre(Synthetic) was fixed with 12%. textile job works sector were also changed to 12% which is welcomed.
But, unfortunately the government has increased the tax rate for cotton fibre and garments from 5% to 12%. The cotton textile sector was witnessing smooth functioning with 5% tax rate. The sudden increase of tax rate to 12% has very badly affected the livelihood of many lakh handloom and powerloom weavers. Compounding rate also a big issue to many lakh MSME Industrialists. Previously until Rs 1.5 crores, industrialists need not submit returns on monthly basis. Whereas they shall pay 1% of the total turnover. Co-optex also was buying the cotton textile products at 5% tax rate.
Synthetic is a petroleum product and hence the tax rates of 12% fixed by the government is correct, whereas in cotton textiles sector also the government is planning to keep the same kind of 12% tax rate is not fair. This will directly affect many lakh handloom and powerloom weavers. They only manufacture 80% cotton textiles. Also 80% of the small traders only contribute in this sector. Hence the ministry of textiles should change the GST for cotton textiles from 12% to 5%. It is the need of the hour. We have also stressed this in our pre budget representation to reduce the GST tax rate to 5% for cotton fabric and garments below Rs 1,000 as before." They said.